I just listened to a podcast where the host made this great point about the differences between the investing media and legendary investors when it comes to what they say about macro factors. The media has a huge incentive to generate fear and anxiety in investors by pushing negative macro-related content (“THE RECESSION IS HERE!” – every video in my YT recommendations lately) because it’s what drives engagement and clicks, and that’s what their business model relies on.
Great investors like Warren Buffett and Charlie Munger don’t have the same incentives, which is why they’ve been saying the same thing about macro for decades, and why what they say is almost never on the front page of CNBC: just ignore it. Just buy great businesses for good prices and hold them — or stay the course in a low-cost index fund, if you’re Jack Bogle. You have a huge advantage over other investors if you listen to quotes like these instead of taking action because some YT clickbait video gave you a scare. Given the market today and all the talk about a recession lately I thought this was a good reminder.
If you're agnostic about those macro factors and therefore devote all of your time to thinking about the individual businesses and the individual opportunities, it's a way more efficient way to behave. —Charlie Munger
If we find a business that we think we understand, and we like the price at which it's being offered, we buy it. It doesn't make any difference what the headlines are. It doesn't make any difference what the federal reserve is doing. It doesn't make any difference what's going on in Europe. We buy it. —Warren Buffett
There is a lot of noise in the daily volatility of the stock market, which too often is a tale told by an idiot full of sound and fury, signifying nothing. Stocks may remain overvalued or undervalued for years. Patience and consistency are valuable assets for the intelligent investor. The best rule? Stay the course. —Jack Bogle
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